\u3000\u3 China Vanke Co.Ltd(000002) 541 Anhui Honglu Steel Construction(Group) Co.Ltd(002541) )
Q4’s revenue and performance increased rapidly, and the annual net profit per ton increased steadily. The company released the annual performance express of 2021, with annual revenue of 19.5 billion yuan, an increase of 45% at the same time, 4 PCT faster than q1-3; The net profit attributable to the parent company was 1.16 billion yuan, an increase of 45% at the same time, in line with expectations; The net profit attributable to the parent company after non deduction was 840 million yuan, an increase of 39% at the same time. Among them, Q1 / Q2 / Q3 / Q4 company achieved revenue of RMB 3.3 billion / 49 billion / 5.2 billion / 6.1 billion respectively, with an increase of 139% / 34% / 16% / 56% at the same time. Under the background that Q4 steel price trend tends to be stable, the demand of steel structure industry has rebounded compared with Q3, driving the company’s Q4 revenue to increase significantly; The net profit attributable to the parent company was RMB 180 / 3.2 / 3.2 / 330 million respectively, increasing by 339% / 116% / 3% / 12% at the same time. Considering that 2020q4 company reversed the impairment loss of RMB 100 million, we judged that the amount withdrawn or reversed in 2021q4 was small. Therefore, after excluding the impairment factors, the actual performance growth rate of Q4 of the company was high (it can exceed 50%, which basically matched the income growth rate). In terms of output, in 2021, the company achieved 3.39 million tons of steel structure output, with a year-on-year increase of 35%, of which Q1 / Q2 / Q3 / Q4 output was 69 / 86 / 88 / 960000 tons respectively, Q4 production achieved “10000 tons per day” in a single quarter, and the capacity release continued smoothly. In terms of net profit per ton, in 2021, the net profit per ton after deducting non production was about 249 yuan, which was slightly higher than the net profit per ton of 244 / 243 yuan in 2019 / 2020. Under the background of large fluctuations in steel prices last year and difficult industrial business environment, the company’s orders, revenue and performance still achieved rapid growth, and the net profit per ton increased steadily, demonstrating the strong business toughness of the leader. Subsequently, with the stabilization of steel price, the clearing of industrial capacity and the continuous construction and release of the company’s capacity, the market share of the company is expected to continue to increase.
The production expansion agreement was signed with Woyang government, and the medium-term production expansion space continued to increase. Recently, the company signed the Honglu intelligent assembly base project investment agreement with Woyang county government, which plans to invest 1 billion yuan to expand production, with a planned land area of 360 mu (240000 square meters), and expand production capacity to the next city. According to the company’s announcement, since 2016, the company has auctioned 5.55 million square meters of industrial land, 620000 square meters of land that has not been auctioned under the signed agreement, with a total of 6.17 million square meters for the construction of steel structure production base. Assuming that 75% of them are used for the construction of steel structure plants, the company’s land resources can build a total production area of about 4.63 million square meters (corresponding to an annual production capacity of 4.63 million tons). According to the capacity utilization rate of the company’s current mature old plants, we expect that the utilization rate of new capacity after 2016 is expected to climb to 140% in the future, corresponding to the potential annual output of about 6.48 million tons. Combined with the annual output of 700000 tons corresponding to the mature capacity before 2016, the company’s potential total annual output is about 7.18 million tons, and there is still much room for medium-term output expansion. Subsequently, with the stabilization of steel price and the optimization of industry competition pattern, the profitability of the company is expected to continue to improve, forming a virtuous circle with the expansion of steel structure output, and promoting the company to enter a new stage of simultaneous increase in volume and price.
The Ministry of housing and urban rural development continues to promote the development of assembly, and the leader of steel structure manufacturing is expected to continue to benefit from the growth of the industry. At the recent press conference of the State Council Information Office, the Ministry of housing and urban rural development said that it would continue to vigorously develop prefabricated buildings, cultivate a number of prefabricated building production bases, establish a professional, large-scale and digital production system based on standard parts, promote the formation of a complete industrial chain and improve the level of building industrialization, and emphasize that new prefabricated buildings will account for more than 30% by 2025, At the same time, we should vigorously develop green buildings. Steel structure is an important implementation way to promote the development of prefabricated buildings and green buildings at the current stage, and the medium and long-term demand of the industry is expected to continue to grow rapidly. As a leader in steel structure manufacturing, the company is expected to continue to benefit from the large-scale demand of the industry and show excellent growth in the future by continuously improving the refined control system, constantly broadening the business growth boundary and strengthening the scale cost advantage.
Investment suggestion: we predict that the company’s net profit attributable to the parent company from 2021 to 2023 will be RMB 1.16/14.5/1.82 billion respectively, with an increase of 45% / 25% / 25% (CAGR in 20202023 is 32%), EPS will be RMB 2.21/2.77/3.47 respectively, and the current share price corresponds to PE of 21 / 17 / 13 times, maintaining the “buy” rating.
Risk tips: the risk of capacity construction and capacity utilization is lower than expected, the risk of steel price fluctuation, the risk of intensified competition, etc.
